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Welspun Flooring, a wholly-owned subsidiary of Welspun India, is looking to expand presence in overseas markets. The flooring segment clocked a turnover of ₹80 crore in FY20 and is targeting a turnover of ₹1,000 crore in the next three years.
In overseas markets, Welspun will compete with Chinese players. With anti-China sentiments being quite strong, the company is fancying opportunities across markets West Asia, the US or Europe.
Flooring solutions are categorised into hard and soft flooring ones. Soft flooring vertical – mostly B2B offerings - typically include carpet tiles, while hard flooring ones – for B2B and B2C - are primarily marble or granite-based tiles.
Increasing overseas demand
According to Mukesh Savlani, President and CEO – International Business, Welspun Flooring already has its “sweet spot” in the soft flooring solutions segment and has seen rising queries.
Hard flooring solutions are being pushed under its own brand in West Asian and South East Asian markets; whereas in the US, Europe including the United Kingdom, and Australia & New Zealand it will be done as a “white label” brand (contract manufacturing for others).
The business mix is expected to be predominantly export dependent in the short-run with nearly 80 per cent of the turnover coming from overseas operations. However, in the long term, overseas to India business is like to have a 50:50 mix.
“We are getting quite a number of queries from South East Asia, Middle East and the US for soft flooring solutions. The hard flooring business is getting priority in certain priority export markets,” he told BusinessLine .
Capacity expansion
Buoyed by the increase in queries and push for exports, capacity addition for hard flooring solutions is being done at the existing Hyderabad facility.
The facility currently has a 3 million sq meter capacity for making hard flooring solutions. Another 4 million sq meters is being added by the end of this fiscal.
Soft flooring vertical has an installed capacity of 7 million sq meters of which 20 per cent is being used for exports. Once business in India picks up, at least 33 per cent of the capacity will be utilized.
India Business
“Business in India is still tepid. July numbers have been double that of June. But we cannot make any prediction till September. Greenshoots for the hard flooring vertical is visible across some markets like Delhi, Hyderabad and Bengaluru,” Savlani said.
Incidentally, the pandemic has already led to a slowdown in construction activities across India – for both offices and residential purposes. However, pick up is expected around the festival season, Q3 of this fiscal onwards.
Channel presence has been strengthened even as Covid-19 outbreak delayed new launches in the segment.
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